RBI To Stop Rs 500 Notes In ATMs? Here’s What Govt Said

In recent weeks, a viral message has swept through social media in India, creating confusion and anxiety among bank customers. The message claims that the Reserve Bank of India (RBI) has instructed banks to stop dispensing ₹500 notes from ATMs by September 2025, suggesting sweeping changes to cash withdrawals across the country. Is there any truth to this message, or is it yet another case of misinformation gone viral? Let’s unpack the facts, analyze what the government and RBI have actually said, and clarify how this impacts the everyday Indian.

The Viral Claim: What the Message Says

According to widely circulated WhatsApp forwards and social media posts, the following claims are made:

• The RBI has supposedly directed banks to discontinue dispensing ₹500 notes from ATMs by September 30, 2025.

• By March 2026, 90% of ATMs would no longer offer ₹500 notes.

• Citizens are “advised” to liquidate their ₹500 notes.

• Only ₹100 and ₹200 denomination notes will be available in ATMs after these dates.

What the Government Really Said: Unmasking the Fake News

Let’s get straight to the point: The government has categorically denied these rumors. India’s Ministry of Finance and the Press Information Bureau’s (PIB) Fact Check unit have publicly clarified that no such instruction has been given by the RBI. The ₹500 note remains legal tender, and there is no official plan to remove it from ATMs or withdraw it from circulation.

In fact, on August 3, 2025, PIB Fact Check posted on X (formerly Twitter):

“Has RBI asked banks to stop disbursing Rs 500 notes from ATMs by September 2025? A message falsely claiming exactly this is spreading on WhatsApp. #PIBFactCheck, No such instruction has been issued by the @RBI, Rs 500 notes will continue to be legal tender.”

— PIB Fact Check, 3 August 2025

What Did the RBI Actually Announce?

So what caused the confusion? The origin appears to be a legitimate RBI circular from April 2025, notifying banks and White Label ATM Operators (WLAOs) to ensure greater access to smaller denomination notes for the general public:

• By September 30, 2025, 75% of all ATMs should be able to dispense ₹100 or ₹200 notes from at least one cassette.

• By March 31, 2026, this should rise to 90% of all ATMs.

Crucially, this directive is not about removing ₹500 notes from ATMs, but about improving the availability of ₹100 and ₹200 denominations. The ₹500 note remains an accepted and valid denomination.

Why Greater Access to Smaller Notes?

The RBI’s move is practical: ₹100 and ₹200 notes are more useful for daily transactions, especially in markets, shops, and public transport. Having ATMs with a higher share of smaller notes reduces the hassle of “change shortage,” making it easier for average citizens to conduct their daily business.

The Power (and Danger) of Fake News

The fake viral message even urged citizens to “liquidate” their ₹500 notes, causing unnecessary panic. This is a classic example of how misinformation can create a ripple effect across society: long queues at banks, fearful rumors, and even potential black-market speculation.

India’s experience with demonetization in 2016 still lingers in public memory, which is why any rumor about currency denominations quickly catches fire. The government and RBI have learned from past communication gaps and now respond rapidly using official fact-checking units.

How Can You Protect Yourself from Such Rumors?

• Rely on official sources: Always check the RBI’s official website, Ministry of Finance updates, or PIB Fact Check.

• Don’t forward unverified messages: If a viral post is not backed by an official press release or credible news agency, treat it with skepticism.

• Report fake news: Social media platforms and WhatsApp allow you to flag or report suspicious posts and messages.

What Remains Legal Tender?

As of today:

• ₹500 notes remain valid and are being dispensed from ATMs and at bank branches.

• There is no official announcement to withdraw or phase out ₹500 denomination notes.

• ATMs will continue to offer ₹500 notes alongside new requirements for a higher presence of ₹100 and ₹200 notes in their cassettes.

Final Take: Don’t Fall for Rumors

In conclusion, the RBI’s directive is meant to ensure better access to small notes for convenience—not to ban or withdraw ₹500 notes. The government has strongly refuted the viral social media claims and urges everyone to check facts before believing or forwarding such messages. Stay informed, check official channels, and keep your cash—₹500 notes and all—without concern for their validity.